Battling YouTube for Money and Creative Control

The video titled "Thank you, I will miss you guys" is barely more than a minute long — all one shaky handheld shot trained on the face of then-21-year-old Ben Vacas.

Vacas, known online as Braindeadly, has big brown eyes, a fauxhawk, a stubbly goatee, and a British accent, discernible as he tells his 40,000 YouTube subscribers goodbye.

"I woke up today hoping to make a video, but I went into a call with Machinima this evening and they said that my contract is completely enforceable. I can't get out of it," Vacas tells the camera. "They said I am with them for the rest of my life — that I am with them forever.

Jesse Lenz

Wikimedia Commons/Cory Doctorow

Ben Vacas said in his shocking video that he would stop making videos rather than submit to Machinima's in-perpetuity contract.

"If I'm locked down to Machinima for the rest of my life and I've got no freedom, then I don't want to make videos anymore," he says quietly. The screen fades to black.

The video closes with a written message: "I'm really sorry, guys, but I am completely powerless. If this is the last thing I say, please don't make the same mistake as I did and always read before you sign something."

Vacas gained prominence online as a top-ranked hunter in World of Warcraft, a video game he has played for more than seven years. He began making YouTube videos last year, mostly of him joking around with other players and commenting on World of Warcraft and other games.

It wasn't long before Machinima, a multichannel YouTube network that specializes in video game content, came calling. The network offered him a partnership: It would put ads on his videos, and he would get a cut of the revenue generated from those ads. It sounded pretty good to Vacas, so he signed a contract with the company in November 2011.

But the devil was in the details: After signing with Machinima, he learned the company would own the rights to whatever content he made for the rest of his life and beyond, "in perpetuity, throughout the universe, in all forms of media now known or hereafter devised." Not only that, but his contract with the network was open-ended. There was no point at which it was set to expire.

Over the past two years, YouTube has quietly transformed from the province of amateurs to an increasingly cutthroat ecosystem where everyone — stars, networks, advertisers — is competing for views, viewers, and view time.

Big money is at stake. That's because YouTube, with the backing of its parent company, Google, is pouring hundreds of millions of dollars into a campaign to compete with traditional television — and it's betting that multichannel networks like Machinima will be the key to its success.

Armed with venture capital, these networks are scooping up talent, offering young creators modest compensation in return for the ability to sell ads on their videos. The more channels a network can bring under its umbrella, the more eyeballs it can promise advertisers, and the richer it becomes.

But a recent string of high-profile disputes is prompting comparisons between YouTube networks and the exploitive Hollywood studios of the 1930s and '40s: Both convinced young and naive talent with little leverage to sign contracts that leave them at a disadvantage. For networks, that means contracts that bind creators to them indefinitely, demand rights to their content in perpetuity, and take large ownership stakes in any resulting businesses.

Internet and intellectual-property lawyers say a rash of public disputes between networks and their talent suggests a serious problem in the emerging industry. But though two of the largest networks, Machinima and Maker Studios — both based in Los Angeles, both darlings of venture capitalists — have been accused of some of the worst practices, investors remain undeterred.

In November, while Maker Studios was in the middle of a public dispute with its highest-profile star, Time Warner was raising $36 million in venture-capital funds on behalf of the network. And in May, just weeks after Ben Vacas posted his emotional video, Machinima closed a round of fundraising, led by Google, worth $35 million.

The question, then, is this: Can networks like Machinima and Maker sustain their rapid growth if the creators on whose backs they built their businesses revolt?

"I'd always wanted to be a filmmaker," says Hugh Hancock, the man generally acknowledged as the godfather of the art form "machinima," when reached by phone at his home in Edinburgh, Scotland. "The issue was, back then in 1996, it was before the digital video revolution, it was before 3D animation was in any way affordable, so I'd always given it up as a pipe dream."

Everything changed with the release of Quake in June 1996.

The 28-level, first-person-shooter game was one of the first games in which developers opened up the video game's code and gave it to players — saying, in effect, make your own games with this technology. Players could repurpose Quake's characters and settings to create original stories, then render them in 3D animation.

At first, these films were called "Quake movies," but as creators began using other games, they were dubbed "machinima" — a misspelled portmanteau of "machine" and "cinema." A small, devoted community developed around the art form.

Lawyers are expensive and proceedings can take years, cheating is cheaper and more effective. What can they do if the same intellectual product appears under another's name. Ask them to sign a one sided contract?

Interesting. I am not a gamer, so I didn't know about this network. Curious if @manicsocratic, @vilkata, @majorxero or other gamers in my network have thoughts on this. There are many contracts that are cut throat like that, but most can take them to court and battle fairness.